IT’s big 3 ahead of peers, says S&P

India’s top three IT companies TCS, Infosys and Wipro are likely grow in double digits at least over the next few years, faster than the global industry average, credit rating agency Standard & Poor’s (S&P) said in a report on Monday. These companies would maintain their investment-grade ratings despite a weak global demand, the report said.

“Largest Indian IT companies have strong margins, are cost-competitive, and have proven delivery models,” said Abhishek Dangra, credit analyst, S&P. “These attributes will help them to weather uncertain and volatile demand.”

Business and reputation risks are rising due to increasing protectionism, “but the three largest Indian IT companies are expected to adapt to the challenges, as they have in the past,” the report said.

However, in the longer term these companies would have to brace for bigger challenges, which would essentially come when foreign IT companies increase their already large employee base in India, it said.

Companies also face issues such as dependence on the slowing economies of the US and Europe, visa issues, rising wages in India, and foreign exchange volatility.

“High unemployment rates, slowing growth, and political activism in many countries are generating opposition to outsourcing,” said Dangra.